Hong Kong (AFP) – Equities mostly rose and oil fell Tuesday as investors assessed the chances of a Middle East peace agreement, while tech firms enjoyed another strong day as the AI bandwagon sped on. However, Donald Trump and Israeli Prime Minister Benjamin Netanyahu’s mixed signals over ending Israel’s attacks in Lebanon caused uncertainty.
While Wall Street ended with more tech-led records, Asia’s recent rally stuttered, while attention also turned to the release of US jobs data at the end of the week. The US president said he had held talks with the Israeli prime minister and had a “very good call” through unnamed representatives with the Hezbollah militant group. Trump wrote on Truth Social that Netanyahu agreed to call off a military raid on Beirut, while the Lebanon-based group stated that “all shooting will stop.” Lebanon’s US embassy said Hezbollah had accepted a US proposal for a “mutual cessation of attacks.”
But the Israeli leader appeared to cast doubt on any truce, while a report in the US news outlet Axios said Trump called him “crazy” and accused him of putting Iran peace talks at risk. In a separate post, the US president stated that “talks are continuing, at a rapid pace, with the Islamic Republic of Iran.” However, Iran’s news agency Tasnim reported that Tehran had suspended dialogue with mediators in protest at Israel’s expanding offensive in Lebanon against Hezbollah. In a message carried by state TV, the Revolutionary Guards intelligence body warned that “crossing the red lines in Lebanon and Gaza” would mean “direct war.”
Tasnim reported that Iran would keep a block on the Strait of Hormuz — through which about a fifth of global oil normally passes — and, with its allies, “activate other fronts,” including the Bab al-Mandab Strait at the entrance of the Red Sea. Both main oil contracts sank more than one percent on Tuesday, having surged the day before on Iran’s comments.
Asian equities mostly advanced after a slow start to the day, aided by another rally in tech firms. Seoul, which has been at the forefront of the rally this year, reversed a morning retreat to end at another all-time high, with Samsung up more than three percent. Hong Kong jumped more than two percent thanks to a 10 percent jump in tech giant Tencent. E-commerce titans Alibaba and JD.com also enjoyed huge gains. Shanghai, Singapore, Taipei, Manila, Mumbai, Bangkok, and Jakarta also rose, but there were losses in Tokyo, Sydney, and Wellington. London, Paris, and Frankfurt were all up.
The largely positive day came on the back of records for all three main indexes on Wall Street, which was bolstered as chip colossus Nvidia rocketed more than six percent after unveiling a powerful laptop chip for Windows machines. That came as Google parent Alphabet announced plans to raise up to $80 billion in stock to fund a major expansion of its AI infrastructure, with Warren Buffett’s Berkshire Hathaway committing $10 billion as part of the deal. Additionally, Anthropic, maker of the Claude chatbot, said it had filed confidentially for an initial public offering.
“Headlines around Iran grab the steering wheel but the AI trade remains the engine for stock markets,” wrote Neil Wilson at Saxo Markets. Traders are also awaiting the release of key US jobs figures on Friday, which should provide a fresh snapshot of the US economy as rising energy prices push inflation higher. They will also be the first under new Federal Reserve boss Kevin Warsh, who last month replaced Jerome Powell, previously criticized by Trump for not cutting interest rates enough.
Stephen Innes at SPI Asset Management noted that the reading could be crucial. “It is not simply a jobs number. It is a test of whether the benefits of the AI boom are spreading into the broader economy or remaining concentrated among a relatively small group of companies and investors,” he wrote. “Strong payrolls would reinforce the idea that AI investment is beginning to generate broader economic momentum. But it would also bolster the case for higher-for-longer rates. Weak payrolls would raise a far more uncomfortable question: has Wall Street’s boom become detached from Main Street’s reality?”
– Key figures at around 0810 GMT –
West Texas Intermediate: DOWN 1.7 percent at $90.64 a barrel
Brent North Sea Crude: DOWN 1.6 percent at $93.44 a barrel
Tokyo – Nikkei 225: DOWN 0.3 percent at 66,734.24 (close)
Hong Kong – Hang Seng Index: UP 2.5 percent at 26,038.32 (close)
Shanghai – Composite: UP 0.4 percent at 4,075.10 (close)
London – FTSE 100: UP 0.5 percent at 10,385.19
Euro/dollar: UP at $1.1652 from $1.1632 on Monday
Pound/dollar: UP at $1.3475 from $1.3458
Dollar/yen: UP at 159.68 yen from 159.67 yen
Euro/pound: UP at 86.47 pence from 86.43 pence
New York – DOW: UP 0.1 percent at 51,078.88 (close)
© 2024 AFP
